View more on these topics

Mott moots 50% chance of green shoots, 20% disaster

PSigma income manager Bill Mott says there is now a 20 per cent chance of Armageddon for the UK economy.

He says the UK economy is now at a long-term inflection point and that we can no longer rely on financial services and consumption to drive us forward.

He says the one in five prospect of Armageddon is one of three scenarios. He says there is a 50 per cent chance that “green shoots” of recovery appear in the likes of cyclicals that start to rally.

“It may only be a slowing in the rate of decline,but the stockmarket is likely to respond positively to some signs that there are early, although small, signs of a pickup. If this is the case, then selective economically-sensitive stocks, such as cyclicals, are offering a once in a generation buying opportunity.”

The other scenario is that the Government overdoes any potential stimulus to the market, creating an inflation problem due to quantitative easing. Mott says: “In our view, the authorities should delay quantitative easing – effectively increasing the money supply – until it is certain that recent aggressive initiatives have not worked.

“My view is that history is littered with examples of authorities tightening, raising interest rates, at too late a stage of economic recovery. We should remember, also, that this need for interest rate rises could coincide with a Labour Government trying to get itself re-elected in spring 2010.”

Recommended

Snapshot to show structured values

Barclays Wealth has launched an online valuation document to help advisers and clients ascertain what their structured products might pay out on maturity.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com